The growth of prices for luxury properties in London has slowed down

The growth of prices for luxury properties in Central London has slowed over the first six months of 2014, prices rose by 2.5%, while in the second quarter of 2014, the growth rate was only 0.4%.

In the most expensive area of Central London, in places such as Mayfair, Knightsbridge, Belgravia and Chelsea, where average property prices range from £2100 to £2400 per square foot, a record price growth of less than 1% in the quarter. But on the streets of Marylebone, where prices average £1,600 per square foot, the cost of real estate grew by 3.5% for the quarter.

Company details luxury real estate Savills also shows that at the topmost sector of the market where the unit price of the property exceeds £10 million pounds, prices fell by 1.5% in the second quarter of 2014, which means that with the beginning of the year the most expensive properties in London saw zero growth in prices. However, this does not negate the fact that property prices in London is more expensive than £10 million remain at 48.0 per cent above their historical peaks.

This fact is also reflected in the activity of buyers. If the number of sales of properties worth in the range of £5 million to £10 million grew by 7% in the first half of 2014 compared to the same period of 2013, the number of transactions for real estate more expensive than £10 million fell by 10% over the same period.

The strongest growth in prices is observed now in the lower segment of real estate, in areas such as Islington, CanaryWharf and Wapping, reflecting confidence of young employees in the financial sector and investors, focused on tenants. For example, average real estate prices East of the business financial center of the city, increased by 10.1% YTD., in 2013 – by 13.3%. The real estate market in the South-West of London, which in 2013 increased by 14%, also slowed this year, in terms of the resistance of buyers inflation growth since the beginning of the year amounted to only 4.4%, and last quarter the growth rate was only 0.4%.

The specter of rising interest rates the Bank of England restricts mortgage lenders that begins to affect the mood of buyers and has a deterrent effect on price increases.

® Helen Entree. 29. 07. 2014.

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